Lawsuit-plagued Washington town mulls tax increase, not dissolution

July 18, 2012|Reuters

By Laura L. Myers

GOLD BAR, Washington, July 17 (Reuters) - Residents of acentury-old Washington state town facing possible municipalbankruptcy because of a flurry of lawsuits will not be askedthis fall if they want to dissolve the city to stop thefinancial drain caused by its mounting legal bills.

Under pressure from residents opposed to disincorporation,Gold Bar city council members voted 4-to-1 on Tuesday againstputting the dissolution issue before local voters this fall.

Instead, the nearly 2,100 citizens of Gold Bar, located inthe foothills of the Cascades Mountains, will be asked inNovember whether they want to pay a one-time levy of between$100 and $150 per home in 2013 to offset the town's growinglegal bills after the city council voted unanimously on Tuesdayto put the issue before them.

The council also agreed to transfer $77,000 from a citywater fund into a litigation fund "as needed." Gold Bar does nothave a city attorney and has to hire a private law firm todefend itself against the slew of mostly recall and publicrecords lawsuits.

Founded in 1910, two decades after a miner discovered goldin gravel along the Skykomish River, Gold Bar is best knowntoday for its white water rafting.

But this year the tiny town could wind up paying about asixth of its $550,000 general fund, or about $90,000, to defenditself against the suits.

Costs of complying with Public Records Act requests havejumped to about $100,000 in 2012 from about $4,000 in 2008,according to the draft ballot calling for disincorporation.

But the city council backed off the idea of disincorporatingunder pressure from residents.

The public records lawsuits stem from a former mayor'salleged use of co-mingled personal and city-related emails, TobyNixon, president of the Washington Coalition for OpenGovernment, told Reuters on Tuesday.

"Gold Bar is a very small town and simply didn't have awell-established way to process public records," said Nixon, aformer legislator and city councilman in Kirkland, a Seattlesuburb.

Gold Bar resident Anne Block, an attorney who has filedseveral lawsuits against the city, told Reuters she intends tocontinue litigation for open records and meetings.

"It's safe to assume that I have no plans to throw in thetowel," Block said.

At Tuesday's meeting, Gold Bar resident and former citycommissioner Lonn Turner expressed the frustration of manylocals when he told Susan Forbes, another one of the litigants,"You need to stop or pack up and move out."

If the city council had put the disincorporation issue onthe ballot, and voters approved it, Gold Bar would have been thesixth town to dissolve itself in the state's history.

If voters reject the tax increase, Gold Bar could stillbecome the latest U.S. municipality to be forced to file forChapter 9 bankruptcy.

But Beavers said he would continue "working on contingencyplans" to stave off that possibility.